This year has seen the start of a pension revolution in the UK. Auto-enrolment will have a positive impact for millions of people as they enter retirement.
Some of the country’s biggest employers have already passed their auto-enrolment duty dates. Hundreds of thousands are entering the planning stage, with roll-out continuing until 2017 for small and micro businesses, and 2018 for new businesses.
The changes in pension law are not something for the future for HR professionals. Plan early is our key message.
The Pensions Regulator estimates it will take the average large or medium-sized business about 18 months to plan and get ready, including making the necessary adjustments to processes and systems such as HR, payroll and pensions. Leaving it as late as possible runs the risk of making preparations more costly and complex.
Our latest employer survey, conducted this summer, indicated that 28% of large private sector employers believe autoenrolment preparations will take less than three months. This is an underestimate, so there are still clearly a lot of employers that need help to understand their new duties. HR professionals play an important part in this.
Employers must know their staging date and develop a plan. Between now and then, they will need to assess their workforce, review their pension arrangement and communicate the changes to employees. The good news is there is an increasing amount of assistance out there for employers. Please use it.
Charles Counsell is executive director at Pension Reform Planning